US and UK security chiefs held an unprecedented press conference in early July this year and issued a joint warning about China. The heads of the FBI and MI5 claimed that China posed a long-term threat to economic and national security. China, for its part, called the allegations unfounded.
But the wind against China has been blowing for some time. And allegations of cyber attacks and espionage are not new either.
China’s biggest tech company Huawei has seen its 5G business prospects tarnished around the world, especially as the US actively urges its allies to ban the company’s devices from their national networks.
India also became more cautious after the Doklam incident. It has joined a growing number of Western countries that have banned China from 5G. In May, Canadian wireless carriers were banned by their government from using Huawei or ZTE devices on their 5G networks. The US, UK, Australia and New Zealand, which along with Canada are members of the Five Eyes intelligence-sharing alliance, had previously also banned Huawei from their respective 5G networks.
This is the result of years of US lobbying among its allies. In fact, the US has gone so far as to warn them that they would reconsider sharing information with any country using Huawei gear, fearing Chinese cyberespionage. In 2018, the Japanese government effectively barred Huawei and ZTE from official contracts. Sweden also banned Huawei and ZTE from its 5G network in 2020.
In India, too, Chinese manufacturers of telecommunications equipment were not allowed to participate in the rollout of 5G. Given that the Chinese account for 20 percent of India’s 4G equipment market and Huawei’s position as a global 5G leader, it is not a far-fetched notion that Chinese vendors could have captured a sizeable share of the equipment market for the next-generation networks .
And now Indian telcos have also effectively banned China’s Huawei and ZTE from their 5G rollouts. So what will be the impact on India’s 5G networks? And why are many countries building China-free next-generation wireless infrastructure?
In early August, Bharti Airtel signed agreements with telecom equipment makers Nokia, Ericsson and Samsung to begin deploying 5G services across India.
Reliance Jio, which only chose Samsung for 4G, was reported in talks with Ericsson and Nokia apart from Samsung. The company has already conducted 5G trials with Ericsson and Samsung. Jio plans to roll out 5G in nine cities by January, most likely starting with Mumbai and Delhi later this year.
Huawei and ZTE will also be phased out of Airtel’s 4G network and replaced by Ericsson, Nokia and Samsung.
The ban from India spells a significant loss for Chinese companies, as Airtel alone has signed nearly $2.5 billion in multi-year 5G equipment deals.
Analysys Mason, a TMT management consultancy, recently told a financial newspaper that Jio, Airtel and Vodafone Idea could spend between $18 billion and $22 billion over the next five years to upgrade and expand their networks for 5G rollout.
The freeze on Chinese carriers will impact Indian 5G networks as Huawei devices tend to be cheaper than Nokia and Ericsson alternatives.
[Byte of Mahesh Uppal on the impact on Indian 5G networks]
However, the Indian government and telecom companies are willing to absorb this impact due to security concerns. The Indian Army plans to use 5G services to improve communications between its front-line troops. Industry 4.0 applications also require 5G, which is used to build proprietary private networks to improve the efficiency of critical infrastructure such as seaports and airports. Overall, there is scope to set up more than 150 of your own private wireless networks in India.
However, Huawei has won 5G deals in Russia, the Middle East, Africa and Asia, including the Philippines and Thailand. South Africa will also use devices from Huawei. Brazil has said it will not bar Chinese firms from bidding for 5G contracts. Norway has meanwhile decided against a ban and leaves the individual companies the right to choose. Huawei is also present in Singapore.